Javelin Raises $1.5M to Bring Lean Startup Method to Big Corporations

Techstars startup Javelin Inc. has raised $1.5 million to continue bringing the “lean startup” philosophy to corporations, VentureWire has learned.

Javelin Inc.

Founder and CEO Trevor Owens

The New York-based company has been experimenting with the idea for the past four years, aiming to unleash potential products locked within corporations by gathering ideas from the front lines and testing them on a small scale before going big.

Members of its 10-person team have trained groups at American Express, United States Postal Service, News Corp. (which owns Dow Jones & Co., publisher of Venture Capital Dispatch) and other corporate giants on how to innovate like a startup.

Along with generating nearly $1 million in revenue from those training sessions in 2013, Javelin generated interest in having software to automate part of the process. The recent funding round, which was done at a valuation north of $5 million, will enable Javelin to quadruple the number of training sessions it holds, expand its software sales team and exit product beta.

“It’s agile [software development] for business,” said Upfront Ventures Partner Mark Suster, referring to the iterative and incremental method popularized more than a decade ago. Upfront Ventures led the round with participation from “Lean Startup” author Eric Ries, 500 Startups and more than a dozen individual investors.

Mr. Suster said although Javelin’s “Lean Startup Machine” training sessions serve the dual functions of generating revenue and marketing the new software, success is hardly a slam dunk.

“Sometimes companies get addicted to the service revenue and it becomes hard to justify the software sale. I think we won’t know for another year or so” how successful Javelin has been, Mr. Suster said.

The software allows employees in departments throughout an organization to share feedback from customers and other sources suggesting new products, features and services. Backed with enough data, those ideas become directed projects that can be tested and, if successful, adopted and promoted by the organization.

The trickle-up method is the inverse way projects are often run at large, traditional corporations and, in the opinion of Javelin Founder and Chief Executive Trevor Owens, long overdue. Mr. Owens said in running training sessions, he’s been surprised by the number of corporate employees who so quickly embrace “the entrepreneurial instinct and passion to create something.”

He’s also been surprised by the number of multimillion-dollar projects that went nowhere.

“The scale of waste is much larger than I would have thought,” said Mr. Owens, noting News Corp. shuttering its tablet-focused news site “The Daily” less than two years after launch as one such example.

Mr. Suster is not taking a board seat, but will advise Javelin as it evolves.

“The risk is whether we can rise above the noise and change the behavior of corporate America or even the world,” Mr. Suster said. “The opportunity is enormous if we can do this.”

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